Thursday, June 30, 2016

State-sponsored corruption at the Gambia National Petroleum Corporation - Part II

In Part I of the blog post on the scandal that has engulfed the country and billed by Jammeh as one of the most serious economic crimes in twenty-two years, we looked at the main agencies central to the corruption in addition to NAWEC, the national electricity company and biggest consumer of heavy fuel oil.

The Ministry of Petroleum is under the the Office of the President and thus subject to constant monitoring by Yaya Jammeh.  The Ministry of Energy has focused its attention on renewable energy while the Board of the GNPC oversees the upstream and downstream sub-sector operations of the Corporation.

Like everything else in a dictatorship, Jammeh has absolute control over every aspect of these agencies, including information flows.  Therefore, to act surprise with his "most serious economic crime in 22 years" announcement using both state-controlled television and the Daily Observer - his propaganda sheet - is pretentious behavior designed to prepare the groundwork so that others will take the entire fall for what Jammeh and his Lebanese and Gambian business associates should take a bigger share of the responsibility for the chaotic mess in the petroleum sector.

The initial organizational configuration of the petroleum sector comprised of Gam-Petroleum (Gambia) Ltd that has invested heavily in the Mandinari fuel depot to procure, store and sell petroleum and petroleum products to NAWEC.  Total International also procures and stores at the same depot for it's own operations.  The Ministry of Petroleum under the Office of the President is charge of the sector.

Mandinari Fuel Depot was built at the cost of US $50 million.  The facility considered a strategic infrastructure by the Jammeh regime was inaugurated in 2008.  Until the fuel depot was nationalized in March 2015, the equity share holdings looked like this: Social Security (31%), GPA (10%), GNPC (7%), Mohammed Bazzi (30.8%), Fadi Mazegi (10.3%), Amadou Samba (9.9%), Premier Investment Group (1%) *.  We are unable to say, for now, who the Premier Investment Group that own 1% of the fuel depot are.

It can be seen that 52% of this "strategic infrastructure" was controlled by private/foreign interests for over six years.  The private businessmen namely Mohammed Bazzi, Fadi Mazegi, Amadou Samba and PIG, together, had controlling shares from the inception with little effort to force them to divest until forced by circumstances beyond the regime's control which will be the subject we intend to address in our next installment.

* Premier Investment Group is listed as owned by Mohammed Bazzi and Fado Mazeggi

Part III will look at the hows and  whys Jammeh arrived at the new share structure, the cost to the public treasury and why we think the Gambian people got the short end of the stick as a result of the exuberant cost of the "nationalization" of the Gam-Petroleum Fuel Depot.